WASHINGTON (Finance) – The World Bank on Monday urged the Group of 20 major economies (G20) to refrain from imposing new export restrictions on critical medical supplies, food or other key products as the world battles the devastating coronavirus pandemic.
In a statement to a video conference of G20 trade ministers, a senior World Bank official said the pandemic was projected to plunge the global economy into a deep recession, disrupting supply chains and hitting critical trade nodes.
To mitigate the impact on poor countries at risk due to the limited supply of medical goods, the global lender urged G20 countries to eliminate or reduce tariffs on imports of key products needed to fight the pandemic, and lower or temporarily suspend tariffs and export taxes on food and other basic goods.
“Continued international cooperation to maintain an open and rules-based trading system will be essential for recovery and sustainable and inclusive development,” Mari Pangestu, the World Bank’s managing director for development policy and partnerships, told the ministers.
“Going it alone is not an option. We will come out much stronger if we all work together with a clear focus on the future,” she said, according to a text of her remarks.
Trade ministers ended the meeting with a pledge to work to keep markets open and ensure the continued flow of medical supplies, but stopped short of calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies.
The Trump administration has waived some tariffs in place on Chinese-made medical supplies, but has drawn fire from some industry groups for its work on new rules that would expand “Buy America” mandates to the medical equipment and pharmaceutical sectors.
Pangestu said the World Bank Group was especially concerned about the impact of the pandemic on emerging markets and developing countries, noting that the global market for 17 key products needed to fight the disease were highly concentrated.
“The poorest countries are extremely vulnerable to policies in exporting countries, including trade restrictions on medical supplies – on top of the risk of being priced out of the markets by richer countries,” she said.
Tariffs on imports of key COVID-19 products were below 4% in advanced economies, above 8% in developing economies and exceeded 11% in least developed economies, she noted.
(Photos syndicated via Reuters)
